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Consider a 8 month European Call option on a stock index. The current value of the index is $ 1500, the strike price is $
Consider a 8 month European Call option on a stock index. The current value of the index is $ 1500, the strike price is $ 1250, the risk-free rate is 2.5%, the dividend yield = 1%%, and the stock volatility has been estimated to be 25%. Compute the value of the option. Hint: Use RMFI software provided. Use Black-Scholes-Merton computation model.
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